Jennifer Knechtel v. Royal & SunAlliance Insurance Company of Canada, 2010 ONFSCDRS 7

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2010 ONFSCDRS 7

FSCO A07-000011

BETWEEN:

JENNIFER KNECHTEL

Applicant

and

ROYAL & SUNALLIANCE INSURANCE COMPANY OF CANADA

Insurer

DECISION ON EXPENSES

Before: Fred Sampliner

Heard: By telephone conference call on October 30, 2009.

Appearances: Christos Nicolis for Ms. Knechtel

Peter Kazdan for Royal & SunAlliance Insurance Company of Canada

Issues:

The Applicant, Jennifer Knechtel, was injured in a motor vehicle accident on May 8, 2002 and I decided her entitlements to statutory accident benefits under the Schedule.¹ On June 15, 2009, I dismissed Ms. Knechtel’s claims for caregiver benefits, housekeeping expenses, catastrophic impairment and a special award. I granted her $4,372.56 plus interest for attendant care benefits and reserved the issue of expenses.

The issue in this further hearing is:

Is Royal entitled to its expenses of this arbitration?
If so, what is the amount of Royal’s arbitration expenses?

Result:

Royal is entitled to its arbitration expenses.
Ms. Knechtel shall pay Royal $16,230.08 for its arbitration expenses.

EVIDENCE AND ANALYSIS:

Ontario Regulation 664 and O. Reg. 275/03 (“Regulation”) set out the criteria to consider in awarding arbitration expenses. These criteria are: each party’s degree of success, written offers to settle, novelty of the issues, obstructing or hindering conduct and any aspect of the process that was improper, vexatious or unnecessary.

In this case, Ms. Knechtel submits that each party should bear their own expenses. Royal maintains she should pay $16,287.60 for legal fees plus $4,000 for disbursements.

Ms. Knechtel’s recovery of approximately $4,000 in attendant care benefits is relatively minimal compared to Royal’s successful defence to her other claims (caregiver benefits, housekeeping expenses, catastrophic impairment designation, special award). I find that Royal was largely successful in the outcome of this arbitration.

Royal made a $33,000 written offer for a full and final release of all Ms. Knechtel’s accident benefits. This offer was made shortly before the commencement of the arbitration hearing, is the sole qualifying offer under the Regulation, and swept into the release all categories of Ms. Knechtel’s accident benefits. The offer is comparable to Ms. Knechtel’s claimed benefits, and is substantially greater than her recovery.

Ms. Knechtel argues her rejection of the offer was reasonable because the unusual nature of her behavioural reaction to the accident and potential for significantly enhanced benefits from catastrophic designation made this arbitration hearing necessary. Ms. Knechtel’s position is based on her individual injury and she makes no submission that the facts of her case have wider application to other claimants. Therefore, I do not agree Ms. Knechtel’s claims involved a novel issue that required adjudication. I reject her position that the parties should bear their own expenses.

At the expense hearing, Ms. Knechtel’s lawyer agreed that $96.95 per hour is the applicable Legal Aid rate for Royal’s lawyer if it is found to be entitled to its expenses of this arbitration. She further agreed with Royal’s modification of its expense claim to reflect 64 hours for lawyer attendance during the ten hearing days, and 96 hours of preparation (ratio of 1.5 to 1 hearing hour). I find Royal’s approximated 64 hearing time hours for its lawyer, 96 preparation hours, and the applicable $96.95 per hour reimbursement rate under the Legal Aid tariff for Royal’s counsel are reasonable, totalling $15,512, plus $775.60 GST.

Ms. Knechtel also does not dispute Royal’s claim for disbursements. At the expense hearing, Royal withdrew all claims for disbursements listed on its bill of costs, except for $1,000 for photocopies, $200 per hour for Dr. Dost’s 5 hours of attendance at the hearing, $500 to prepare him for testimony and $1,500 for his report. I find Royal’s total claimed $4,000 disbursement expenses conform to the Regulation and are likewise reasonable.

Based on Royal’s overall success and relatively greater settlement offer than the award, I find it is entitled to its expenses of the arbitration. However, I take in consideration my comment in the June 15, 2009 decision that the parties hindered and prolonged the hearing with voluminous unnecessary and duplicative documents, over-lengthy examinations, cross-examinations and submissions in awarding expenses.

Under the circumstances, I find it appropriate to reduce Royal’s total $20,287.60 claim for arbitration expenses by 20%. I find that Royal is entitled to $16,230.08 for its arbitration expenses under subsection 282(11) of the Insurance Act.

January 18, 2010

Fred Sampliner Arbitrator

Date